San Antonio Even with concerns over implementation of inherent reasonableness, competitive bidding and consolidated billing, industry leaders maintained an upbeat tone at the Health Industry Distributors Association's 1999 Executive Conference at the Hyatt Regency Hill Country Resort in late February.

"It appears the home care market has more opportunity and more optimism than 12 months ago," said HIDA vice president of membership services Cara Bachenheimer, adding that conference attendance of 380 was down slightly from last year's 395. "They are learning to deal with the oxygen cut, taking advantage of the opportunities that consolidation has created and not relying so much on Medicare."

But legislative pressures remain HIDA priority items. A Washington policy update session that featured a satellite appearance by two Health Care Financing Administration officials was primarily devoted to IR.

A day earlier, Bachenheimer said a coalition of health care groups is prepared to sue HCFA to stop implementation of the controversial pricing policy. "If HCFA continues on the course it's on," she said, "we're seriously considering filing a suit to force HCFA to implement IR authority in a rational way."

The coalition contends that HCFA is using unreliable and invalid data, focusing on retail pricing and ignoring the added costof doing business with Medicare, and that it is comparing products that differ.

"They went to the wrong place, looked at the wrong products and came up with the wrong results," said panel member Alan Parver, counsel to the National Alliance of Infusion Therapy.

There is further industry concern that price precedents for IR will be established in the Polk County, Fla., competitive bidding project.

A HCFA official, conceding competitive bidding could influence inherent reasonableness, warned that IR might be the lesser of two evils. "In the public view, HCFA has been criticized for not paying more attention to prices," said Robert Wardwell, director of community post-acute care. "If these rather modest attempts to implement IR are frustrated, it could be a short-lived victory. Ultimately, Medicare can't be sustained without competitive pricing."

Wardwell speculated that final IR notices will be issued sometime this summer.

On consolidated billing, Wardwell said HCFA will require home health agencies to bill for all home medical equipment products and pass through payments to the HME providers. Bachenheimer said HIDA will aggressively fight to change that position, claiming HCFA exceeded its authority.

Timothy Hill, HCFA's deputy director of program integrity, said the agency continues its internal discussion to clarify the certificate of medical necessity fax and cover letter issues. "It's a high priority and we hope to have something out relatively soon, in bureaucratic terms," he said.

Hill added that the agency is drafting a memorandum to clarify final policy on supply closets-basic HME equipment providers supply to physicians to keep on hand for patients' temporary use. While the agency acknowledges there is "benefit to the beneficiary" to retain use of familiar equipment, there is a concern that the policy not violate antikickback laws, Hill said. -K.G.